P200 HIKE TOO HIGH?: MSMEs call for ‘balanced’ wage policy

By Mariela Angella Oladive

As labor groups push for a PHP 200 daily wage increase in Western Visayas, business sectors and service providers have voiced concerns over the financial sustainability of such a move.

The issue was discussed during the Regional Tripartite Wages and Productivity Board (RTWPB)-6 public hearing on Oct. 8 at the Diamond Jubilee Hall, Iloilo City Proper.

RTWPBs set regional minimum wage rates under the Wage Rationalization Act, or Republic Act No. 6727.

For many workers, the current minimum wage of PHP 513 falls short of meeting basic needs.

United Labor–Panay representative Elmer Forro highlighted the daily struggles faced by families, while a healthcare worker from a private hospital noted that low salaries drive staff to government or corporate jobs, potentially compromising local health services.

Meanwhile, micro, small, and medium enterprises and service providers warned that a PHP 200 daily increase could strain small businesses, citing thin profit margins and operational challenges.

The Capiz Provincial MSME Development Council stressed that a one-size-fits-all wage policy does not reflect the realities of smaller enterprises.

“We are not opposing the wage hike, but MSMEs’ sensitive systems must be considered,” a council representative said, emphasizing the risk of destabilizing the backbone of the local economy.

Transport operators echoed similar concerns.

“If we add PHP 200 to the minimum wage, we might be able to provide it [for modernized jeepneys], but our operations would probably only last for three months, before we stop because the amortization is high,” the representative said.

She added that the Local Transport Plan and Route Rationalization Program in Iloilo City has yet to be fully implemented, with rising fuel prices further burdening operators.

Hence, she suggested that it may be more prudent to defer the wage increase until the route rationalization becomes more stable.

From the security sector, a representative voiced conditional support.

“A wage increase is indeed needed because our employees are really stretched thin, but we must also consider the impact on our clients,” the representative said.

“A large increase could force us to reduce staff, and any adjustment should be minimal to maintain balance,” the representative added.

The Iloilo Business Club suggested retaining the minimum wage at PHP 513 for establishments with 10 or fewer employees and allowing minimal adjustments for larger firms.

DTI-6, represented by Supervising Trade-Industry Development Specialist Therese Grace J. Marla, also presented the potential financial impact of a PHP 200 daily wage increase.

In her presentation, Marla illustrated that for nonagricultural firms with more than 10 employees, monthly payroll costs could rise from PHP 135,432 to PHP 188,232, assuming a workforce of 12 employees.

Small businesses with 10 or fewer workers could see costs increase from PHP 53,350 to PHP 75,350, based on a five-worker setup.

Meanwhile, agricultural establishments employing 10 workers could face a rise from PHP 105,600 to PHP 149,600 per month.

Marla cautioned that the proposed increase could strain the financial capacities of MSMEs, potentially resulting in staff reductions, shortened working hours, delayed hiring, or a shift toward informal employment practices.

Some enterprises, she noted, might also compensate by raising product or service prices, which could impact consumers.

To ease the burden, she recommended possible mitigation measures such as government subsidies, tax relief, or access to low-interest loans.

“MSMEs may need targeted support such as wage subsidies, tax breaks, or access to low-interest loans,” Marla said, adding that improving operational efficiency and adopting digital tools could help offset labor costs and enhance competitiveness.

From January to June 2025, Region 6 recorded more than 73,000 new and renewed enterprise registrations, distributed as follows: Aklan — 8,029; Antique — 11,091; Capiz — 12,562; Guimaras — 4,979; and Iloilo — 37,066.

Hundreds of representatives from the labor, management, and government sectors attended the public hearing to present their respective positions on the proposed wage increase.

The RTWPB-6 is scheduled to deliberate on the proposal on Oct. 23, with any approved adjustment set to take effect 15 days after its publication, in accordance with Republic Act No. 6727.

Chairperson Atty. Sixto Rodriguez Jr. assured that both labor and management sectors will be given the opportunity to fully express their concerns before any decision is finalized.

At present, the minimum wage in the region stands at PHP 513 per day for nonagricultural, industrial, and commercial establishments with more than 10 employees; PHP 485 for smaller firms; PHP 480 for the agriculture sector; and PHP 6,000 per month for domestic workers.